Zwift has announced significant layoffs and a “pause” of its highly anticipated hardware development program.
The company was working on its own range of smart bike offerings and direct-drive trainers, but development had experienced delays and proved more complex than expected, as noted in the From the Top podcast, with a launch scheduled for this year.
However, following similar layoffs at Wahoo and Peloton, Zwift has now made the decision to lay off staff and halt development of its hardware line.
Zwift released a statement quoting the impact of the current “macroeconomic environment” as the reason for the hardware development program to be halted. This is hardly surprising with supply chain issues, rising costs across industries and apparently a dwindling demand for indoor trainers. Additionally, halting material plans means a ripple effect throughout the company, including layoffs and restructuring.
“Given the current macroeconomic environment, we have decided to reduce our hardware offering, putting on hold plans to launch a smart bike,” Zwift’s statement said. “As a result, Zwift has implemented difficult but significant changes to the organization of the company. We are grateful for the contributions of everyone involved and have done our best to support them.”
The news, first reported by DCrainmaker.com, suggests that the majority of these layoffs come from the hardware development department, with other departments also being affected. Zwift has not confirmed the number of laid off employees.
Plans to develop its own range of gear were announced before the pandemic hit in 2019. Needless to say, the indoor training sector has been one of the big winners from the Covid-bump, as countless runners have hopped on Zwift and turbo trainer stock was as rare as chicken stock. teeth. A good time to get into the hardware market, or so it seemed. Fast forward two years and apparently Covid-bump was actually a poisonous gift for Zwift’s delayed hardware plans.
As the world went into lockdown, turbo trainers were among the hottest products. Manufacturers couldn’t keep up with demand as we were all forced to go indoors and those without trainers quickly invested while others upgraded existing gear. That bubble has apparently burst, though, and anyone who was going to buy a high-end indoor trainer probably already has one by now.
It’s been less than six months since Zwift teased its new smart bike and direct-drive trainers in a hardware purchase customer survey, but it seems like it’s already too late. It makes sense that last winter in the northern hemisphere may have been the last period of high demand for high-end trainers for a while, as Covid newcomers to indoor riding improved their purchases entry-level models and that more experienced cyclists could finally access the stock to improve their old devices. Consider this drop in demand, and sadly, Zwift’s decision to suspend hardware plans makes sense. As much as many of us would have loved an IRL Tron bike, there simply isn’t room for another high-end trainer in the market as demand dwindles and supply levels off.
Zwift PR Director Chris Snook told CyclingTips, “We have scaled our business to support significant expansion in hardware. The difficult but necessary decision to downsize the business represents a loss of projected revenue that would ultimately have been due to hardware. In other words, the discontinuation of hardware plans creates a subsequent drop in anticipated revenue from hardware sales and subsequently the unfortunate loss of jobs for many people.
Zwift calls it a “pause” rather than a shutdown, which means as unlikely as it sounds, Zwift hasn’t ruled out returning to the hardware market one day. That day seems a few years away at best, and again, most people at Wattopia who want a top-of-the-line trainer might already have one.
However, everyday Zwifters have nothing to worry about. Snook pointed out that the number of Zwift subscriptions continues to grow and that the pause in hardware development means an increased focus on the core Zwift software experience. Snook renewed Zwift’s commitment to releasing new product features more frequently and concluded, “We believe the changes we are making now will allow us to continue to support this growth while protecting the company’s healthy financial position. “.